Government might waive interest on farm loans

In a bid to address farmers’ distress ahead of 2019 general elections, the government is considering waiving interest on crop loans for farmers who pay on time, costing an additional Rs 15,000 crore to the exchequer, according to sources. There is also a proposal to completely waive premium for taking insurance policy for food crops. The premium on horticultural crops could also be reduced, they said.

The ruling BJP government has swung into action to address distress in the agriculture sector after it lost power to the Congress in three heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh in the recent state polls.

According to sources, several rounds of meetings have taken place at the highest level in the last few days to chalk out a plan to address difficulties faced by farmers in view of low realisation in several crops amid bumper production.

To provide immediate relief, one of the proposals being studied is to waive 4 per cent interest rate on farmers repaying farm loan promptly within the due date. At present, farmers get for short-term farm loan of up to Rs 3 lakh at 7 per cent interest rate. An additional incentive of 3 per cent is being given to farmers for prompt repayment.